A retirement plan bases on its monthly payment on the employee’s salary and the number of years of service. In contrast, a 401(k) plan relies on individual and occasionally employer contributions and measures the performance of the investments made therein. Even though most companies now have 401(k) retirement plans, there are significant differences between the best and least generous of these programs. Some firms, for instance, provide a sizeable employer match and even further contributions based on pay. Others have reduced fees and a better selection of investing possibilities. If you want to know what you’re truly getting when you enroll, it’s a good idea to read the small print. Check out our ranking of the finest retirement plans if you want to know which businesses are the greatest at providing their staff with the means to retire with dignity.
ConocoPhillips offers a significant employee matching program; investing 1% of your income immediately provides a 6% match. Additionally, the corporation provides a discretionary supplementary match that ranges from 0% to 6% depending on employee age, company success, and other criteria. The winning margin is 9% overall. Several investing possibilities are available, including various international index funds, stocks, and bonds. At 100%, vesting happens right away. Although enrollment is optional, employees must make a minimum commitment of 1% to be eligible to receive employer contributions.
The transition from a pension to a 401(k) plan was made by all non-union employees at Boeing in 2016, and the company has been quite pleased with the outcomes. With assets totaling more than $47 billion, it is the country’s second-largest plan behind the Fortune 500 company plan. The employer contributes 75% of the first 8% of what employees put into their retirement accounts. In addition, the employee is responsible for contributing, the amount of which is determined by the employee’s age and can range anywhere from 3% to 5% every year. Employees of Boeing are immediately enrolled in the plan, and they have access to a diverse selection of investment options, including stock, bond, and foreign index funds.
Amgen offers the greatest retirement plans, offering one of the more generous employer contribution policies. Whether or not the employee contributes to the plan, Amgen provides a core payment of 5% upfront. Additionally, the employer contributes 10% and matches employee contributions up to 5% of their wage. An employee stock purchase program is also available. Amgen’s funds offer a diverse selection of international, bond, and stock index funds. Employees are automatically enrolled in the plan and become fully vested right away.
Philip Morris Worldwide Inc.
Although working for the tobacco industry’s king may make you uneasy, Philip Morris tries to reward and keep the best employees. The employer contributes an additional 7% of eligible employee compensation, matching the first 5% of employee contributions, bringing the total match up to 12%. There are several stock and foreign index funds to choose from, but no bond funds exist. Employees who meet the requirements are instantly enrolled and given full ownership rights.
Citigroup Inc. (C)
The retirement plans offered by this large bank are among the best in the industry since the company matches dollar for dollar the first 6% that workers contribute to their plans. On top of that, there is an additional 2% contributed. However, it is vital to keep in mind that Citigroup’s contributions are provided all at once at or after the end of the year. In contrast, employee contributions are made at various times throughout the year. There is a selection of index funds focused on stocks and overseas stocks, but none that focus on bonds. The employees are immediately granted full ownership of the company once enrolled, which occurs automatically.
The Typical Match in a 401(k)
There are various sorts of plans available on the market for employers to choose from when offering a 401(k) plan to their employees. These plans’ arrangements can differ from firm to company. Partial matches and dollar-for-dollar matches are two popular types of matching. Partial matches work on the principle that, based on a formula, a percentage of the money you contribute to the plan will also be contributed by your employer. According to Scott Schleicher, a senior financial advisor at Personal Capital in Denver, Colorado, and group manager of the financial planning specialists division, partial matching occur when your company matches a portion of the money you contribute to your 401(k) up to a predetermined level.